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Is video surveillance making a comeback?

Is video surveillance making a comeback?

It seems like all we have been talking about these days is access control. Sure, thermal and infrared technology continues to be a hot topic during the pandemic, but for many end users, it was, and still is in some respects, more about deciding if that even is the best technology to solve the problem. And, more importantly, if it is, finding the right company among a sea of companies trying to cash in on the thermal camera space. 

Today, though, it is more about creating an ecosystem that provides the right amount of security for each situation. So, whether it is a cannabis medical facility or critical infrastructure, the right combination of video surveillance and access control technology, all underpinned with sound cybersecurity practices, is the mantra of the day. Not to mention having the right people in place, but that is a story for another day.

Turning back to video surveillance, though, it looks like a drop in demand in 2020 is in the rearview mirror, as projects that were put on hold in 2020 are finally getting the green light here in 2021.

Looking at the latest research, the global video surveillance market revenues, which are set to reach $24 billion by the end of 2021, will grow to $31.9 billion by 2025 with a total CAGR of 7.1 percent between 2020-2025, according to London-based research firm Omdia’s latest Video Surveillance and Analytics Intelligence Database.

“This marks a quick recovery for the video surveillance market,” said Omdia, noting, “Demand that was suppressed in 2020 will return and revenues will be bolstered by projects that were postponed in 2020 due to COVID getting the greenlight in 2021.”

The scoop on thermal, China’s impact

The size of the thermal body temperature solutions market has rapidly grown to $1.3 billon globally in 2020, according to Omdia. Driven by COVID 19 precautions, this technology has been adopted by several regions, in particular China, East Asia, India and the Middle East. However, without the growth in thermal body temperature solutions, Omdia found that the global video surveillance equipment market declined 3.8 percent globally in 2020.

Despite being a driving growth factor in 2020, Omdia forecasts the thermal body temperature solutions market will decline rapidly in 2021 to just $137 million, an 89.8 percent decline, ultimately limiting the overall video market surveillance market growth.

Interestingly, the Chinese video surveillance market growth, which is estimated to have grown 6.4 percent in 2020 compared to the global average of 2.2 percent, is mainly attributed to the thermal body temperature solution. “The market excluding such solution is estimated to have decline by 0.8 percent,” Omdia noted. “As such, China now accounts for 50 percent of the global market revenues. However, a combination of COVID 19 and the completion of Xue Liang program has resulted in declining government investment in video surveillance in China. Even so, the government investment will continue grow, all be it at a slower rate.”

Tommy Zhu, Senior Analyst – Physical Security at Omdia, explained: “One of the major factors that drove the China’s market growth in the past few years was government investment. Although the year of 2020 marks the completion of Xue Liang program, the government will continue to enhance the construction of Safe China during its 14th Five-Year plan. In addition, as China is rolling out its trillions of dollars investment in new infrastructure construction, the demand for video surveillance equipment is expected to continue to grow. Besides, China’s ambitious to accelerate the transformation to a digital economy will boost the investment in both public and private sectors.”

Geopolitics, supply chain constraints and AI

Omdia expects average selling prices of video surveillance equipment to increase in the short term as US-China geopolitical tension and supply chain constraints from the COVID-19 pandemic increases pressure of vendor margins.

In recent years U.S.-China geopolitical tensions within the video surveillance industry have escalated, and Omdia believes that the initial NDAA and blacklisting of Hikvision, Dahua and Huawei within the U.S. is being augmented by new FCC regulations.

“The semiconductor shortfall driven by geopolitics and COVID impact has affect all industries, and video surveillance is no expectation,” said Oliver Philippou, Research Manager - Physical Security at Omdia. “This disparity between supply and demand is expected to last until mid-2022.”

Longer term Omdia expects that there will be a greater adoption of the network camera products using AI deep learning acceleration and inference at the endpoint. This will result in higher average prices of network cameras.


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